20180831-广发证券_香港_-A-Share_Investment_Strategy_2页_359kb

A-Share Investment Strategy Summary

Core Content

The document outlines the strategic importance of retirement funds in the context of China's endowment insurance system, focusing on their role as the third pillar alongside public pensions and occupational pensions. It highlights the recent launch of ChinaAMC's first retirement fund, which is publicly available as of August 28. The development of retirement funds is expected to enhance the endowment product market and improve the overall market environment.

Main Points

• Retirement Fund as Third Pillar:

  • Retirement funds are positioned as the third pillar of the endowment insurance system in China.
  • They include personal savings endowment insurance and commercial endowment insurance.
  • Public pensions dominate the current system, while personal pensions are underdeveloped.

• Tax Incentives for Retirement Funds:

  • Tax incentives have been used in other countries to promote pension systems.
  • China has introduced a commercial endowment insurance pilot project for personal income tax.
  • The pre-tax deduction limit is set at the lower of 6% of total income or Rmb1,000 per month.
  • The tax incentive scheme is currently limited to commercial endowment insurance but may expand to include more retirement financial products.

• Impact on A-Share Market:

  • A mature pension system is expected to benefit institutional investors over the long term.
  • Based on U.S. experience, about half of mutual fund assets are likely to be invested in the stock market.
  • This suggests significant growth potential for the A-share market as retirement funds develop.

• Risks and Challenges:

  • The development of retirement funds may fall short of expectations.
  • There is a need for more robust policy support and market mechanisms to ensure their success.

Key Information

• ChinaAMC's Retirement Fund: Launched on August 28, marking a significant step in the development of personal pensions in China.
• Tax Deduction Policy: The pilot project allows for pre-tax deductions up to 6% of income or Rmb1,000 per month.
• Market Growth Potential: With a large population and growing middle class, the pension system in China has substantial room for expansion.
• Investment Allocation: Mutual funds are expected to allocate a significant portion of their assets to the stock market as the pension system matures.
• Institutional Investors: The growth of retirement funds is anticipated to benefit institutional investors, with current leaders expected to maintain their positions.

Ratings Definitions

Company Ratings:

• Buy: Expected to outperform the benchmark (Hong Kong Hang Seng Index) by more than 15%.
• Accumulate: Expected to outperform the benchmark by more than 5% but not more than 15%.
• Hold: Expected relative performance between -5% and 5%.
• Underperform: Expected to underperform the benchmark by more than 5%.

Sector Ratings:

• Positive: Expected to outperform the benchmark by more than 10%.
• Neutral: Expected relative performance between -10% and 10%.
• Cautious: Expected to underperform the benchmark by more than 10%.

Legal and Ethical Disclosures

• Analyst Certification: The analysts certifying the report confirm that their views reflect their personal opinions and that their compensation is not tied to specific recommendations.
• Disclosure of Interests:
  • GF Securities (Hong Kong) and its affiliates do not hold shares in the securities mentioned.
  • No investment banking relationships with the companies in the past 12 months.
  • Analysts and their associates do not serve as officers of the companies and have no financial interests in the securities.
• Disclaimer:
  • The report is for informational purposes only and does not constitute an offer to buy or sell securities.
  • It is intended solely for GF Securities (Hong Kong) clients.
  • No liability is accepted for any loss arising from the use of the report.
  • Past performance does not guarantee future results.

Copyright and Distribution

• The document is copyrighted by GF Securities (Hong Kong) Brokerage Limited.
• No part of the content may be copied or re-disseminated without prior written consent.